
Hillhouse-backed China pet services business seeks US listing

New Ruipeng Pet Group, a China-based pet care services platform that counts Hillhouse Capital as a significant shareholder, has filed for an IPO in the US.
The company claims to be the country’s largest pet care platform – and the second largest globally – by number of hospitals and revenue in 2020 and 2021. As of September 2022, it had 1,942 hospitals in 111 cities under 23 brands. Nine months earlier, Ruipeng had three times more hospitals in its network than the combined total for the companies ranked second through 10th in China.
It served 2.5m active customers and treated approximately 5.8m medical cases in 2021, up from 1.7m and 4.3m a year earlier. In addition to pet care services – which principally involve medical and grooming services – there is a B2B offering that comprises procurement for pet clinics and pet stores, technology-enabled third-party diagnosis, veterinary education, and marketing-as-a-service.
Hillhouse is the only external investor with a share exceeding 5%, according to a prospectus. Its 35.8% interest is greater than that held by management, chiefly Yonghe Peng, who founded Ruipeng in 1998 and took it nationwide through a series of acquisitions.
However, the company has received substantial private funding, before and after it was restructured offshore in 2019 to facilitate an IPO. The prospectus references a funding round in late 2019 that saw Hillhouse contribute USD 41m, while Riverhead Capital – the PE arm of Sunshine Insurance Group – and Fortune Venture Capital put in CNY 64.8m (USD 9.6m) and CNY 38.9m, respectively.
A year later, Ruipeng raised USD 560m at a valuation of nearly CNY 30bn, including USD 100m from Tencent Holdings, USD 200m from US-based investor Boehringer Ingelheim, USD 50m from Snow Lake Capital, USD 13m from OrbiMed, USD 20m from Aspex Management, and USD 15m from Lake Bleu Capital. Meanwhile, earlier this month, Nestle subscribed to a convertible note worth USD 50m.
The company generated CNY 4.78bn in revenue in 2021 – up from CNY 3bn a year earlier – with 56.7% from pet medical services, 5.5% from grooming, 26.8% from supply chain and procurement, and 11% from other local services. Its net loss widened from CNY 999.8m in 2020 to CNY 1.31bn in 2021. In the first nine months of 2022, revenue was CNY 4.32bn and the net loss came to CNY 1.1bn.
China’s pet industry has proved popular with PE. The likes of pet food producers Shandong Seek Pet Products, Shanghai Enova Pet Products, Chongxing, and Gambol have received funding in the past couple of years, alongside pet-focused lifestyle brand Vetreska and smart device manufacturer Petkit.
Frost & Sullivan estimates that China is the second largest pet market globally with pet-related spending reaching CNY 265.6bn in 2021. It is expected to hit CNY 537.6bn in 2026. In 2021, only 23.7% of Chinese households had a pet compared to 69.7% in the US, while average annual spending per pet was CNY 4,700 versus CNY 8,100.
For pet care services specifically, China is projected to grow from CNY 54.5bn in 2021 to CNY 135.6bn in 2026, reflecting growing awareness of pet healthcare, longer pet life expectancy, and more aging-associated pet diseases.
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